Stocks Look Cheap Historically, But They May Get Cheaper

With stocks at new highs, are prices too high for the value-minded investor to pay? I say no — although if you are a value-minded trader, the answer may be yes. The way I look at stock valuations is by comparing consensus forward earnings to current long-term interest rates. That tells me whether the earnings […]

Republicans: The Party of Big Government?

What should investors do about this month’s elections, in which control of Congress went to the Democratic party for the first time in a dozen years? I suppose the first thing is to say “Thanks” to the guys who got booted from office on Tuesday. Be grateful — it’s been a nice run for investors […]

Creating Unemployment

Her’s a fantastic idea that will make everybody richer. Let’s pass a law setting a minimum price on used cars. How about, say, $15,000? If you’ve got an old beater you want to sell, and you were worried that you’d only get a couple thousand bucks for it, then this law is for you! Now […]

Hands Off My Net

The S&P 500 has more than doubled over the last 10 years — a decade in which the Internet came out of nowhere, and established itself as the technology platform of the new global economy. The Internet has been the greatest engine of economic growth the world has ever seen. Now, for the first time, […]

Maryland Wallops Wal-Mart

If you own stock in Wal-Mart Stores, be afraid — be very afraid. Yes, it wasn’t all that long ago that I was recommending buying shares of the giant retailer. But things have changed. Right after I recommended Wal-Mart last October it rallied by as much as 15%. But now it’s given most of that […]

Stocks Will Shine Again

Two weeks ago I suggested that investors sell Exxon Mobil and use the proceeds to buy Wal-Mart Stores. If you’d made the trade that day, then you’d be ahead 11% overall — Wal-Mart is up 3.6%, and Exxon Mobil is down 7.4%. I imagine most people didn’t follow my advice, and I understand why. It’s […]

Running Out of Gas

There aren’t many iron-clad rules in investing, but there’s one: Bet against anything that the vast majority of investors agree upon. Right now, based on conversations with my clients, who are some of the best and brightest investors on Wall Street, I’m seeing a strong bullish consensus about energy and energy stocks. While I hate […]

Don’t Look a Gift Horse in the Mouth

Alan Greenspan had his “conundrum,” and I’ve got mine. Greenspan’s conundrum: why are long-term interest rates staying so low for so long? Mine is why stock-market volatility is so low despite a global economic background that, on the face of it, is fraught with risk and uncertainty. Volatility is simply a fancy word for the […]

Lessons From the Poker Table

Last month in Las Vegas, 5,619 contestants were vying for the 36th annual World Series of Poker’s No-Limit Texas Hold-‘Em Championship. The total prize pool was $52,818,610 — by far the richest purse in the history of sports. Just think about what’s at stake. $7.5 million goes to the first-place winner. Any player who finishes […]

The London Terrorist Attacks and the Stock Market

Why did stocks finish the day higher after Thursday’s tragic terrorist bombings in London? There are several very simple reasons. To begin with, the market wasn’t surprised. Ever since September 11, 2001, markets have been braced for terrorist attacks. London knows as well as any city in the world what it’s like to live with […]

Refining Your Oil Strategy

On Thursday afternoon crude oil futures hit $60 a barrel, and investors hit the panic button. Apparently $59 was fine. $60, for some reason, was a big problem. There’s nothing fundamental about $60 a barrel. There’s no reason to think that the economy will do just fine with $59 oil, but will fall into a […]

Stocks vs. Bonds: Stocks Win

Here are two investments I’d like you to consider. The first is a Treasury bond maturing in 10 years. The second is the Standard & Poor’s 500. Think you already know everything there is to know about them? Think again. Let’s start with the bond. As of Thursday’s close, it was priced to yield 4.07%. […]